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IT Outsourcing: What Big Companies Can Learn from Midsize Companies

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Mid-Market Buyers and their IT outsourcing Mid-Market Buyers and their IT outsourcing

Midsize companies experience more success with their IT outsourcing deals than large companies because they take a "big bang" approach, according to the results of a recent outsourcing survey.

While midsize companies came later to the IT outsourcing party than their big company counterparts, recent research shows that they may get more out of their IT services deals.

According to a survey of 277 outsourcing buyers conducted by outsourcing analyst firm HfS Research and the London School of Economics, 63 percent of mid-market buyers said their outsourcing initiatives had been very successful at reducing costs compared to 44 percent of large companies. Consider these other stats:

  • 42 percent of mid-market buyers said their deals were very effective in meeting compliance and regulatory requirements, compared to 30 percent of large companies.
  • 33 percent of mid-market buyers said outsourcing had given them more effective global operations, compared to 18 percent of large companies.
  • 30 percent of mid-market buyers said their deals were very effective in providing access to new business process acumen compared to 17 percent of large companies.

Why are the smaller companies seeing more gains from outsourcing? They take what HfS Research founder Phil Fersht describes as a "ripping off the band-aid" approach to outsourcing. "Quite simply, mid-market organizations have to bundle more processes together into one broader deal to make it large enough to warrant the attention of the leading services vendors," Fersht says. "[They] rarely will have the luxury of outsourcing step-by-step."

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